Meralco rates to drop by P0.10 per kWh this month

Residential customers of power utility giant Manila Electric Co. (Meralco) will enjoy a 10-centavo rate cut per kilowatt hour (kWh) this month. The drop in Meralco rates was made possible by the decline in transmission and system loss charges, Ivanna dela Peña, the firm's utility economics head, said Monday. The transmission charge declined by 15.41 centavos per kWh and system loss by 2.82 centavos for residential customers, dela Peña said. Residential customers consuming 200 kWh would see a P27 drop in their electric bills this month, including reduced taxes and other bill components. For those consuming 300 kWh, the reduction is around P40. Dela Pena said this is the second straight month that the overall electricity bill has gone down. Meralco external communications head Joe Zaldarriaga said that power rates would likely still go down in the next few months. “With the entry of the rainy season, we expect the hydroelectric plants, which generate much cheaper power, will begin operating at nearly full capacity," he said. Zaldarriaga said "the increase in generating capacity, combined with lower demand because of the cooler weather, is expected to dampen prices in the WESM. Hopefully, these factors can help bring down electricity rates even further." Dela Peña said that "while the generation charge registered an increase of 8.44 centavos per kWh, this was more than offset by the combined reduction of 18.23 centavos per kWh in transmission and system loss charges, resulting to a net reduction of 9.79 centavos per kWh for residential users in these three pass-through charges." According to her, the lower transmission charge comes from the zero back-up charge of the National Grid Corporation of the Philippines (NGCP) that arose from the non-availability of back-up capacity for May. Back-up capacity is an ancillary service recovered through NGCP’s billings. System loss charges declined after the loss level went down from 8.21 percent to 8.01 percent, based on the 12-month comparative period ending in March 2010 to that April 2010. The system loss levels which were used in arriving at the charges for this months and next, Meralco said. The generation charge increased because of the higher cost of power sourced from the Wholesale Electricity Spot Market (WESM) and the National Power Corp. (Napocor). The WESM, serves as the trading floor and clearing house for buying and selling electricity. Meralco gets about 10 percent of its power requirement from WESM, as well as from state-owned Napocor. —VS, GMANews.TV